Issue link: https://maltatoday.uberflip.com/i/1372546
maltatoday | SUNDAY • 16 MAY 2021 12 FIAU A SPECIAL REPORT A changing FIAU for changing times The FIAU had always been one of the more 'secretive' government units in that it rarely commented on its work or investigations. It has, however, been opening up lately. Why has there been a need to become more visible? We're still secretive – that's very important and we never showcase any case-specific in- formation. Incidentally, there is currently a worldwide drive to strengthen relations between Financial Intelligence Units and the media. This is also be- ing discussed within Egmont, the international group of FIUs where we meet with all our in- ternational counterparts. But here in Malta, we identified that there was a need to open up way back in 2017, mainly be- cause of several circumstances that had taken place that year, and also by the many miscon- ceptions at the time about the FIAU's roles and responsibili- ties. For example, some people thought that we have criminal investigative and prosecutorial powers. So we had to reach out and provide information for the sake of clarity. This led us to build a relation- ship with media houses and other stakeholders by showcas- ing statistics and releasing more information in terms of what we are doing, our achievements and our plans. How has the FIAU responded to the sensational developments in Malta, which have thrust its work into the limelight and catalysed a good deal of international scruti- ny from Moneyval, the European Banking Authority, the Financial Action Task Force and the Euro- pean Commission for example? Where does Malta now stand in this respect? They provided us with a yard- stick, however, we haven't stuck solely to those recommenda- tions. The FIAU itself triggered several improvement actions across all areas within FIAU, many of which were brought forward by the FIAU's recent- ly set up Strategy, Policy and Quality Assurance Section. This led to adoption of an in- ternal action plan for the years 2021 - 2023 to further excel the FIAU's AML/CFT operations. We were catalysts of change and we are proud that our team managed over the last four years to implement a vast amount of recommendations and action points. Today we are in a position where these same supranation- al authorities are inviting our technical staff to participate in the reviews of other jurisdic- tions, an important achieve- ment for us. We have also been invited by other jurisdictions to take them through our systems, such as CASPAR, and to ex- plain how they contribute to an effective risk-based AML/CFT supervisory framework. We've, in fact, met several on a one- to-one basis as they too are in the process of enhancing their systems and were keen to learn from us and take some ideas. The FIAU had for years been seen as being toothless, with its investigations not having been acted upon in a number of well known cases. It had suffered from a lack of resources and little political direction. This situation appears to have taken a turn for the better. How and why? I tend to disagree with the term 'toothless'. We have always done our work to the best of our knowledge and ability, and in all circumstances. This was also acknowledged in the Moneyval report issued in 2019, when it found the FIAU had performed its duties independently and fairly in all cases. With the recent increase in our resources, we can now do better. We can reach out more and invest in human and IT re- sources, which has resulted in more quality and efficiency in our work. That was important because we have adopted a new method- ology for reviewing subject per- sons on a cycle basis, coupled with the fact that, from an intel- ligence analysis perspective, we are experiencing a significant increase in suspicious transac- tion reports. These are coming not only from subject persons but from other sources as well, and we needed the resources to be able to process that amount of intelligence. Notwithstanding that, we have also invested internally to instil a culture change. Our teams have been provided with the necessary skills in terms of leadership and authenticity. We have empowered our people, who are key to the success of the FIAU and often contribute to the ongoing process to fine- tune its operations. Tangibly speaking, how have capacity and resources been increased over the last couple years, and what was the prime driver of this change? The main drivers of change were the recommendations from the international bodies, which, as a unit, we have taken very seriously. We also received a significant increase in our budgetary allocation, so, even from a political perspective, we have been backed with all the resources necessary to perform our tasks effectively. The increase in STRs, the in- creased compliance levels and even the change in the compli- ance culture are not only the re- sult of the FIAU's efforts, but it is also because these considera- tions are being embraced more and more by all the stakehold- ers. The subject persons them- selves are investing heavily and are beefing up their resourc- es and compliance systems. They are ensuring they are performing all the checks re- quired, which is also triggering an increase in STRs. The more checks being carried out by the subject persons, the more sus- picious reports are submitted, and this has been seen across all sectors. From the perspectives of the authorities concerned – such as us at the FIAU, the Malta Fi- nancial Services Authority, the Malta Gaming Authority, the Police, Attorney General's of- Financial Intelligence Analysis Unit Director Kenneth Farrugia speaks to David Lindsay about the fundamental changes taking place at the country's money laundering watchdog, whose operations have been placed continually under the spotlight in Malta since 2017. Since then, significant strides have been taken by the Unit and, according to Mr Farrugia, the FIAU of 2021 bears little resemblance to the FIAU of 2015 FIAU Director Kenneth Farrugia